Saudi Arabia’s General Authority Civil Aviation (Gaca) has invited four or five local and Bahraini banks to bid for a privatisation advisory contract.

The entities to be structured for privatisation include four small airports.

Gaca chose to invite smaller investment banks and exclude Saudi Arabia’s larger banks with experienced advisory teams. The invited banks are seeking consultants with the relevant expertise to join their bids as junior partners.

The successful bank will advise on creating business units to manage small airports and other services, and potentially their partial privatisation. The eventual airport management packages are expected to include refurbishment work.

A recent public statement from Gaca said it was “working tirelessly with an ambitious plan for the privatisation of the airports in the kingdom.” It plans to privatise all airports in Saudi Arabia by 2020, but some may be struggle to attract investors due to low passenger numbers and lack of land transport links.

The tendering of Taif international airport as a public-private partnership (PPP) has stalled due to concerns over passenger numbers.

The Washington-based International Finance Corporation were advising on the structure of the PPP. The build-transfer-operate model was based on Medina’s successful Prince Mohammed bin Abdulaziz International airport, which entered full operations in June 2015.

Larger airports may be more suitable for private investment. Bids were due for the contract to operate and maintain Jeddah’s King Abdulaziz International airport (KAIA), Saudi Arabia’s largest airport in terms of passenger traffic, earlier in June.

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